English-speaking (US) educational speaker, youtuber, and podcaster
Description
Vocal Characteristics
Language
EnglishVoice Age
Middle Aged (35-54)Accents
North American (General) North American (US Mid-Atlantic)Transcript
Note: Transcripts are generated using speech recognition software and may contain errors.
A non compete agreement is an agreement an employee signs as a condition of being employed, that if the employee leaves, the employee will not take a job with any of the employers, competitors over some period of time. Typically a year or two non compete agreements came into vogue during the dot com era of the late 19 nineties, when internet companies were struggling to grow as fast as possible because of network effects. That is, the more users a web service had, the more likely it was to attract even more users. Network effects are why, despite the fact that so many of us dislike facebook, we keep using it even if a better competitor came along without facebook's large user base, the competing product won't be as useful. So kind of in a perverse way none of us like facebook, but we keep using it because everybody else keeps using it when you're a dot com company looking to grow as quickly as you can. One of the worst things that can happen is that one of your employees goes to work for a competitor, taking with him or her all of the knowledge about your product. A competitor could shave months or even years off of product development time by poaching employees from a company that's further along in development. And so dot com companies would require that their employees promise not to work for a competitor for some period of time after leaving. That's the non compete agreement as the internet space matured. That need to grow fast, quickly became less pressing. Yet non compete agreements remained and they appear to have become weaponized, such that employers now use them to prevent employees from demanding higher wages. A non compete agreement makes it harder for workers to obtain competing offers to use as leverage in asking their current employers for raises. Imagine what would happen if in order to buy a car from your local car dealer, you had to agree not to buy your next car from a competing dealership, Well, you wouldn't be able to comparison shop and so would find it much harder to negotiate your next car purchase. What's new here is that President biden is pushing to ban non compete agreements. Now, on the one hand, I'm against the government intruding itself into private contracts. On the other, I like symmetry. It seems to me that if the government is intent on weighing in on non compete agreements, it should require that they apply in both directions. For example, if a worker is prohibited from going to work for a competing employer, then the company should be prohibited from hiring a competing worker. That is the non compete agreement should prohibit the employer from hiring to the same extent that it prohibits the worker from working